David Clark: Lessons from 32 Years of Fund Investing - Why Exits Will Be Larger | E1131

ℹ️ EPISODE INFO

Released

March 25, 2024

Duration

1h 20m

Channel

The Twenty Minute VC

Watch on YouTube

▶ Open ↗

📝 EPISODE DESCRIPTION

David Clark is the CIO of Vencap, one of the leading fund of funds in the venture landscape. David has been at Vencap for 32 years and has been an LP his entire career. ----------------------------------------------- Timestamps: (0:00) Intro (00:23) Introduction to Venture Capital Insights (03:17) Beginning a Career in LP & VC Perspectives (07:07) The Art of Spotting Great Managers in VC (10:10) Adapting to Changes & Evaluating the Illiquidity Premium (13:57) Venture Valuations & Market Dynamics Post-COVID (18:19) Navigating Data Effects & AI in the VC Landscape (23:19) Liquidity in Venture: Strategies and Market Concerns (28:20) Venture Capital on a Global Scale: Europe and Beyond (32:53) Exploring VC Innovations & Strategic Evolution (38:11) The Importance of Management and Succession Planning (45:25) The Economics of VC: Fees, Carries, and Future Returns (51:23) Reflections on Investment Decisions and Mistakes (56:59) Adjusting Deployment Timelines & Performance Metrics (01:04:46) The Future of Venture Returns & Fee Sensitivity (01:09:35) Quick-Fire Round ----------------------------------------------- In Today’s Episode with David Clark We Discuss:

1. From Unemployed Student in Love to Leading LP: How did a girlfriend lead to David taking his first steps into the world of fund investing? What does David know now about fund investing that he wishes he had known when he started?

1. Is Being an LP Harder than Ever Before: Does David agree with Doug Leone, “venture has transitioned from a boutique high margin business to a low margin commoditised industry”? Does David agree with Ryan Akinna @ MIT, “it is harder than ever to be an LP”? Does David think that venture returns will worsen in the coming years? Has the denominator effect for LPs gone? Do LPs have liquidity today?

1. What Makes the Best Performing Funds: What are the single biggest commonalities in managers that did a 3x net DPI fund? Of managers with a 3x net fund, how many had a single company return the fund? How do the best firms do generational transition? How do the best firms take cash off the table and sell part or all of their position?

1. Five Things LPs Hate In Potential VC Investments: What are the two most common reasons David will turn down a manager? How does David feel about the varying fee and carry levels? How does David feel about the compression of deployment times of funds? How does David feel about managers increasing fund size so significantly on every cycle?

1. Fund Sizes, Exits and Concentrating Returns: Why does David believe exit sizes will increase and fund sizes could be even larger? Why does David think that despite the above, the concentration of returns will be even smaller? Is David concerned by the IPO window being largely shut and the increased regulation on M&A? ----------------------------------------------- Subscribe on Spotify: https://open.spotify.com/show/3j2KMcZTtgTNBKwtZBMHvl?si=85bc9196860e4466 Subscribe on Apple Podcasts: https://podcasts.apple.com/us/podcast/the-twenty-minute-vc-20vc-venture-capital-startup/id958230465 Follow Harry Stebbings on Twitter: https://twitter.com/HarryStebbings Follow David Clark on Twitter: https://twitter.com/daveclark85 Follow 20VC on Instagram: https://www.instagram.com/20vchq Follow 20VC on TikTok: https://www.tiktok.com/@20vc_tok Visit our Website: https://www.20vc.com Subscribe to our Newsletter: https://www.thetwentyminutevc.com/contact ----------------------------------------------- #harrystebbings #20vc #founder #ceo #venturecapital #businessstrategy #davidclark #vencap #cio

🎤 SPEAKERS

• David Clark

  guest

• Harry Stebbings

  host

• Narrator

  other

🧾 EPISODE SUMMARY

In this episode of The Twenty Minute VC, featuring David Clark and Harry Stebbings, David Clark: Lessons from 32 Years of Fund Investing - Why Exits Will Be Larger | E1131 explores veteran LP Debunks Myths On Fund Size, Power Laws, And Liquidity LP David Clark of VanCampen (VanCap) reflects on 32 years backing venture funds, emphasizing that venture is a power-law business where a tiny fraction of companies drive industry-wide returns. He challenges the narrative that billion‑dollar funds can’t generate fund‑returning exits, showing data of numerous $1B+ distributions and even a $15B single‑fund outcome. Clark explains VanCap’s highly concentrated, outbound-only, top‑tier manager strategy, their skepticism toward emerging managers, and why they often wait until Fund III to commit. He also discusses liquidity timing, succession in VC firms, fund size, fees, and why venture remains attractive despite mediocre average returns, provided you can access the very best managers.

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